TCS sees business in digital consolidation

India’s largest information technology services company Tata Consultancy Services reckons large global customers are now using emerging technologies that the company can tap with capabilities built over the past few years.
 
“I see tremendous opportunities in agile, intelligent, automation and cloud (services) among our existing customers and prospects. Large enterprises are now in a phase of digital consolidation using emerging technologies,” Rajesh Gopinathan, chief executive officer of TCS, said in a New Year email to colleagues on Monday.
 
“We have been at the forefront of this transformation of customer organisations, helping them navigate change using the TCS Business 4.0 approach,” he wrote while urging the company’s employees to learn new technologies.

 

The IT giant has been re-branding itself as a digital-first technology service provider. Over the past few months, TCS has adopted the Business 4.0 approach that looks at new ideas and business models and focuses on customers and valuing and retaining employees.
 
It has begun dismantling its traditional people to projects model and is offering clients the benefits of automation. TCS’ transformation is taking place against the backdrop of jobless growth in the Indian infotech industry, which is training a large chunk of its engineers in digital technologies and TCS has reskilled over 250,000 employees.
 
“With the proliferation of digital technologies and agile becoming mainstream, I encourage each of you to leverage our digital learning platform to equip yourself to ride the digital wave. I urge everyone to practise and promote the culture of learning and become agile and digital champions to realise your potential,” Gopinathan wrote in his mail.

 
Demand for emerging technologies is expected to drive growth for infotech services in 2018 but Indian companies are yet to acquire a large footprint in this area. Digital revenue comprises 19 per cent of TCS’s revenue and it is slightly behind Infosys at 23 per cent and Wipro at 22 per cent. International competitors like Accenture, IBM and Capgemini earn 50 per cent, 46 per cent and 32 per cent of their revenue, respectively, from digital services, according to Bloomberg.
 
While the industry remains hopeful of digital projects, deal sizes are small with most clients still evaluating the new technology. TCS has bagged a multi-year project from Rolls Royce to offer the automobile company data analytics services.

 
TCS, which will present its third-quarter results this month, is facing subdued demand in the banking and retail sectors in North America. In the second quarter, TCS earned 52 per cent of its revenue from North America and 33 per cent of its revenue from banking and financial services and insurance.
 
“We are well positioned at a time of another tremendous change in our industry. Our history, strengths and core values position us to navigate this change," Gopinathan wrote.